Equal Credit Opportunity Act

Equal Credit Opportunity Act


Obtaining credit can be a difficult process for any
business owner and especially for first-time borrowers. But keep
in mind that different lenders have different standards; if you
did not meet the standards of a particular restitution, you may
still qualify elsewhere. If you have a full understanding of why
the initial lender didn't approve your application, with time
and more attention to these areas, you can improve your proposal
as a result and may succeed the next time you apply.

Women and minority applicants may be concerned that they
have received less favorable treatment which is unrelated to
their creditworthiness. All business applicants have certain
protections against unlawful discrimination under the Equal
Credit Opportunity Act. The Act makes it illegal for lenders to
deny your loan application, discourage you from applying for a
loan, or give you less favorable terms than another applicant
because you are a woman or a minority group member.


Under the law, a lender may not take factors such as sex,
race, national origin, or marital status into account.


In addition, the lender may not ask for information about
your spouse unless your spouse has some connection to the
business, or unless you are relying on your spouse's income to
support your credit application or relying on alimony, child
support, or separate maintenance payments to establish
creditworthiness. But the lender may ask you for information
about your spouse if you are living in, or you are relying for
security on property located in, a community property state
(Arizona, California, Idaho, Louisiana, Nevada, New Mexico,
Texas, Washington, or Wisconsin).


Whether your business is large or small, if you are not
granted the credit, be sure to discuss any questions you may
have with the lender.